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ESG relates to the real estate sector
because property is considered one of the
largest contributors to environmental pol- Every listed Vietnamese company on the
lution. “Most corporates are aware of ESG stock exchange, whether HNX or HoSE,
these days and listed companies in Vietnam is required to have a mandatory ESG report.
are subject to mandatory ESG reporting,”
said Mr. Troy Griffiths, Deputy Managing Many high-rise buildings often have large
Director of Savills Vietnam. All recent emissions, so most recent projects are required
developments must have certain creden- to have ESG certification or meet ESG
tials to satisfy their ESG targets. “Many standards. A lot of new constructions and
new buildings and industrial parks are buildings are being developed that meet
obtaining green certificates like LEED
and EDGE, and in order to remain com- green certification or ESG criteria,
petitive, developments need to have some including industrial park projects.”
sort of ESG rating,” he added.
ESG investment opportunities in the
real estate sector, he went on, are down-
stream and include investing in methods Mr. troy Griffiths,
for saving or reducing power consumption, Deputy Managing Director, Savills Vietnam
developing carbon-neutral buildings, and
installing electric charging stations. In
terms of building sales, buyers will require part,” Mr. Liew said. “Obviously, we will social aspect is up to each company, as it
that properties meet ESG requirements, be out of the game if we do not do it, so is about the health and quality of a com-
and developers need to pay attention to there’s no alternative.” pany and its workplace, so progressive
this. Environmentally-friendly buildings, Modern technology plays a huge role and listed companies in Vietnam should
owned by ESG-compliant companies, are in dealing with the environmental side of pay attention. “As Vietnam is a dynamic,
more likely to attract occupiers in the long ESG. Utilizing Building Information Mod- competitive market, there is pressure on
term. “As most global and multinational eling (BIM) and other methods of meas- resourcing, and in order to retain and
corporations (MNCs) now need to satisfy urement is now affordable, and the addi- attract talent, most companies are satis-
ESG requirements, they will see ESG-com- tional costs are much less than they were fying the social side of ESG,” he said.
pliant properties as a good investment, and five years ago. “When creating a compet- The governance aspect, he went on,
that in turn reduces the risks and increases itive product, dealing with the environ- has been in the news recently, especially
potential business outcomes,” he said. mental component is not that expensive, with what has been happening with Tan
and exposes you to many more tenants Hoang Minh and the FLC Group. “For
PrOBLeMs ANd PrOMise and occupiers,” said Mr. Griffiths. The companies to act on the global stage, they
Not long ago, ESG was dismissed as must comply with strict governance stan-
unnecessary when it came to commercial dards and this must be ingrained into
and industrial real estate. However, the Given the flow the company culture,” he said. “Vietnam
concept has since become almost obligatory of foreign capital is a member of many free trade agreements
and viewed as presenting major opportu- (FTAs) and is heading in the right direction
nities, with issues such as climate change pouring into Vietnam, on its march toward transparency and
posing a real risk to the value of assets held unsustainable assets will good governance.”
by almost every company around the globe. be less competitive and at In the future, both domestic and inter-
“Urban ecosystems need to be at the heart risk of becoming obsolete national investors will increasingly demand
of urban and development planning,” said as foreign investors better “green” standards for their occupied
Ms. Bui. “While some may argue that’s a increasingly require strict space as a benefit to employees and other
constraint on development, urban devel- stakeholders. “The real estate sector has
opment going in the right direction is a ESG measures.” long considered an investment in sustain-
worthy trade-off. This also creates oppor- ability to be important, but this is often at
tunities for developers, owners, residents, odds with the profit-driven pressures many
and strategic departments to promote cre- companies face,” said Ms. Bui. “Proactive
ativity in building a livable city.” approaches to increasing sustainability
Similarly, Mr. Liew said that over credentials should now be the norm for
recent years, many countries and regions future-proofing commercial property, cre-
around the world, led by the US, the EU, ating better long-term returns and satis-
and China, have accelerated the transition fying occupier demands and needs.”
to a green economy to tackle the devas- In order to stay competitive, real estate
tating effects of climate change. As these businesses have no choice but to satisfy
have committed to becoming low-carbon, ESG requirements, Mr. Griffiths believes.
resource-efficient, and socially-inclusive Without this, businesses will head down-
economies, it is only a matter of time wards as the effects are multifaceted. “A
before these become imperative for others, lack of transparency means less foreign
particularly if they are a prerequisite in Ms. trang Bui, interest, fewer social objectives mean
doing business. “The EU may impose a General Manager, less employees, and a drop in popularity
levy on imports from places with poor Cushman & Wakefield Vietnam will mean less business and fewer ten-
ESG, so everyone will have to play their ants,” he said. %

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